Download Weekly Note - 01 September 2025
Local Market Update:
South African equities were broadly flat last week. Domestic data showed slowing M3 money supply growth at 6.75% alongside accelerating credit growth of 5.8%, reflecting mixed liquidity dynamics. July’s trade surplus of R20.29bn was offset by a substantial budget deficit of R150.85bn. Corporate headlines included Northam Platinum reporting a 14.4% decline in FY earnings amid rising costs despite record sales volumes. The SA Post Office suspended parcel shipments to the US after duty-free access was revoked.
European Market Update:
European equities fell to two-week lows, pressured by banks after a UK think tank recommended taxing interest earned on Bank of England reserves. NatWest, Barclays, and Lloyds shares declined, contributing to a 0.6% fall in the STOXX 600, marking its first weekly loss in four. German inflation accelerated to 2.1%, exceeding forecasts and raising scrutiny ahead of eurozone CPI releases. Investor sentiment was further influenced by concerns over political risk and rising costs for banks. Hedge funds in Europe gained appeal as some investors shifted away from US exposures.
US Market Update:
The S&P 500 edged lower amid margin pressures from inflation and rising tariffs, particularly affecting tech and AI-exposed companies such as Dell. Consumer spending rose at its fastest pace in four months, reinforcing expectations of a 25bps Federal Reserve rate cut in September. Tariff exemptions for imports under $800 expired, raising costs for businesses and households. Political risk persisted as President Trump’s legal dispute with the Fed remained unresolved. Market attention is increasingly focused on upcoming labour market releases, which are expected to influence the scale of the Fed’s forthcoming policy adjustment.
Asia Market Update:
China’s Caixin manufacturing PMI returned to expansion at 50.5, while the official gauge remained in contraction at 49.4, indicating a mixed recovery in industrial activity. Japan’s PMI was 49.7 and South Korea’s 48.3, reflecting ongoing softness in regional manufacturing exacerbated by US tariff pressures. Markets are also monitoring diplomatic developments between China and India and awaiting comments from President Xi, which could influence cross-border trade and investment sentiment. The broader outlook suggests continued caution in Asian industrials, with potential implications for supply chains and regional export dynamics.
Currency Market Update:
The South African rand remained largely unchanged despite mixed domestic data and a key US inflation release. The US dollar traded flat as markets absorbed a rise in the Fed’s preferred PCE inflation measure, maintaining expectations for a rate cut next month. The Indian rupee breached the critical 88/USD threshold, closing at a record low of 88.3075, amid foreign equity outflows and elevated dollar demand from importers and speculators. Investors continue to weigh domestic policy developments and international capital flows as key drivers of currency volatility across emerging markets.
Commodity Market Update:
Gold rose to a four-month high last week, supported by heightened expectations of a US Federal Reserve rate cut, while silver surpassed $40/oz for the first time in over a decade. Oil prices remained in a narrow range as intensified Russia-Ukraine airstrikes disrupted supply, offset by rising output and weaker demand linked to US tariffs. Russian crude exports fell to a four-week low of 2.72 million barrels per day. Despite these supply-side concerns, a Reuters poll suggested limited price upside this year, amid persistent oversupply and moderating global demand.